Last great interstate a NAFTA highway fraught with controversy

With the end of 2012 marking the 20th anniversary of NAFTA, it’s instructive to take a fresh look at the book that chronicles that battle over the last interstate highway — a NAFTA superhighway — yet to be built – Interstate 69, The Unfinished History of the Last Great American Highway by Matt Dellinger.

Dellinger credits David Graham, grandson of a railroad magnate and son of an auto manufacturer in Southern Indiana whose family farm and businesses made them legendary in their small community for decades, with the idea of building an interstate highway connecting Evansville with Indianapolis. That little idea that started over breakfast with some of Graham’s influential friends grew into a NAFTA superhighway concept in short order. Absent federal funding, an interstate through southwest Indiana was a non-starter, but connect that idea to a larger intercontinental highway connecting the busiest trade crossings in Canada with those in Mexico, and now you’ve got six other states and a plethora of economic interests joining Indiana in the quest for not only funding, but also a whole new trade corridor that will transform North America.

The book tells the story of I-69 through Dellinger’s travels on the proposed route, meandering through each of the seven states the NAFTA highway would traverse and telling the personal stories of landowners versus the special interests advocating for the highway, of dying cities and towns desperate for economic development and jobs the road could bring against the backdrop of the reality that a road can also bypass and kill thriving towns and change the face of communities forever — whether for good or bad. Dellinger also tells the plight of politicians stuck in the middle, who when push comes to shove, usually side with special interests and even grant the backers special favors.

Knowing highways can make or break a community and even a state, through facilitating commerce or providing seamless travel between major cities which can attract major employers, the author captures the tension between the project’s cheerleaders and detractors, and often the urban versus rural divide. To the big business interests pushing I-69, the small towns and farms in the path of this NAFTA trade corridor are just green fields to paved over for the ‘greater good’ — casualties in the name of ‘progress.’

Since the U.S. Supreme Court Kelo decision, property rights have been trumped by economic development. Though the concept of I-69 pre-dates Kelo, Kelo is key in understanding the threat of I-69 to property rights across America. Dellinger documents the plight of Indiana and Texas landowners in their quest to quash I-69 through their respective states. In both cases, farmers preferred achieving I-69 through upgrading existing highways rather than cutting through large new swaths of farm and ranch land.

Cronyism from day one
The book opens in 1990 around the breakfast table at the home of David Graham in Washington, Indiana. David invited two friends, David Cox, with the Daviess County Growth Council, and Jo Arthur, with the Southern Indiana Development Corporation, to meet David Reed who was conducting an economic development study for the Hudson Institute on the potential for development in southern rural Indiana. Reed was staying with Graham, which was no coincidence since Graham knew the CEO of the Hudson Institute, Mitch Daniels, since 1976. Daniels later became Indiana’s Governor who pushed road privatization, tolling, and, of course, I-69.

Graham brought up the idea of the Southwestern Indiana Regional Highway Coalition to build an interstate connecting Indianapolis with Evansville, but it was Reed who directed Graham and his cohorts to explore an even bigger idea — to connect it to NAFTA in a multi-state effort to open-up an international trade corridor from the border crossings in Michigan to Brownsville and Laredo, Texas. Reed later published his report making the case for I-69 to spur NAFTA trade and rural economic growth.

Graham, following in his father’s footsteps — Robert Graham once served as director of the National Automobile Chamber of Commerce who represented the auto industry on the original Pan American Highway Committee — then took his idea on the road, selling it to the other six states, primarily to Chamber of Commerce groups, and eventually establishing a Midcontinent Highway Coalition to lobby for I-69 in D.C., with oil & gas guy John Caruthers of Shreveport hired to run it.

With the help of Congressman Frank McCloskey, a rough map of I-69 made its way into the federal highway bill known as ISTEA in 1991 with his last minute amendment inserting high priority corridors 18 (from Indianapolis to Memphis, TN via Evansville) and 20 (from Laredo, Texas to Texarkana) and then amending the reach of corridor 18 (from Shreveport to Houston) to connect with corridor 20, even before all seven states’ Departments of Transportation were even briefed on the concept.

The Coalition eventually hired some big guns, Carolina Mederos of Patton & Boggs (founded by the son of Hale Boggs, creator of the highway trust fund) in 1995, and in 1996, Randy Delay, brother of Houston-area Congressman Tom Delay (and House Majority Whip at the time), to lobby Congress. Greater Houston Partnership, Houston’s Chamber of Commerce led by none other than Kenneth Lay also Chairman of Enron, paid an extra $100,000 to hire Delay. They delivered.

NAFTA highway I-69 is born
Mederos, former Department of Transportation executive turned lobbyist, managed to further define the route of I-69, particularly corridor 18, in the 1995 National Highway Designation Act. The Coalition wanted specifics on the route between Memphis and Shreveport and determined it would traverse through both Mississippi (at Trent Lott’s insistence) and Arkansas. Texas Senator Kay Bailey Hutchison ensured corridor 18 would extend beyond Houston to the Rio Grand Valley and designated corridors 18 and 20 as future parts of the interstate highway system.

Mederos knew there was no longer an interstate highway program to fund I-69 so she and Delay decided to create a whole new program as part of the federal highway bill known as TEA-21 in 1998, just to ‘find’ some funding for I-69. She called it the “National Corridor Planning and Development Program” and the “Coordinated Border Infrastructure Program,” arguing the original interstate system primarily built east-west highways, and with the advent of NAFTA and the north-south trade patterns and manufacturing and population moving south, it justified new highways — particularly I-69.

TEA-21 officially designated corridors 18 and 20 Interstate-69 and extended the corridor to capture the existing I-69 in Michigan in northern Indiana as well as I-94 Port Huron, Detroit, and Chicago to take in the Ambassador Bridge and Detroit-Windsor tunnel crossings to bolster the trade argument. On the southern end, I-69 splits three ways with a leg going to Laredo, Brownsville, and McAllen. So now I-69 officially extended from Canada to Mexico. Together the northern and southern border crossings account for half the truck traffic that crosses both borders. The bill also snagged $140 million in funding over five years — I-69 eventually receiving $70 million of it.

Indiana insurrection
With the legislative groundwork laid, Dellinger delves into the birth of the opposition to I-69 in the same place it all started — Indiana. Even Indiana’s State Museum and its Hall of Transportation describe the inherit resistance to privatization. Dellinger describes the railroad age in Indiana and how private railroad operators extorted money from travelers via tollhouses that blocked free passage, and they had the power to “decide which towns thrive and which ones decline.”

Once again, the Graham family played a role in Indiana’s transportation history when David’s grandfather Ziba started a street car system that eventually branched out to interurban rail lines. By 1910, Ziba’s children were building trucks and paved roads were gaining ground. The rise of the bus replaced rail, and eventually the auto replaced both around 1950.

Before Indianans could blink, their Governor Mitch Daniels began to push privatization yet again and bought into the foreign-owned toll road idea that caught fire in Texas. Daniels eventually sold the Indiana Toll Road to Spain-based Cintra and Australian-based Macquarie for 75 years. The toll rates doubled, the financial footing of the private consortium now teetering toward insolvency, and the unpopularity of public private partnerships (P3s) have ensued.

Thomas and Sandra Tokarski live on a wooded 35 acres in Stanford, Indiana, just southwest of Bloomington, IN, right in the path of I-69. Here the battle between urban and rural would take root. They didn’t see the need for the highway, and neither did the federally-funded Donahue study published in 1990. But the Indiana Department of Transportation (INDOT) still pursued it, forcing the Tokarskis to take on the battle against I-69.

They meticulously picked apart every feasibility study they could get their hands on, and began by writing to their politicians, pleading for facts and sanity to rein over the false hope of economic development. They promised environmentalists, fiscal hawks, and farmers and ranchers would all rise up against the project, and they were right.

They organized their neighbors and formed Citizens for Appropriate Rural Roads or CARR, but got more roadblocks and abusive government. In 1995, the Tokarskis filed a federal lawsuit under the National Environmental Policy Act (NEPA) citing INDOT’s failure consider all viable alternatives — primarily the upgrade to existing roads instead of the new corridor route. The Environmental Protection Agency agreed and forced INDOT to do a supplemental environmental impact statement to consider all the impacts. Ultimately, this only bought more time to fight it politically, which they lost when the consultant hired by INDOT to do the new study was hopelessly biased in favor of the new terrain route since it was a company that also did business with INDOT — classic conflict of interest. Consequently, the consultant advanced the new terrain route.

At the same time, Daniels was pushing road privatization and initially proposed a P3 for I-69, but later found it wasn’t toll viable enough for a private deal, so he proposed not only the new terrain route, but to fund it using some of the whopping $3.85 billion up-front payment from the sale of the Indiana Toll Road to build I-69 as a freeway. It’s no coincidence that the route chosen directly benefited David Graham, the highway’s father, who was close to Daniels. Indeed, later the state altered the route again to give the Graham family land on all four corners in Washington, Indiana where it intersects US 50.

Ultimately, the Tokarskis lost again when the first two and a half miles of I-69 from Evansville was built in 2008. They’d battle for 20 years, and yet still live under the threat of I-69 running through their serene property near Bloomington. Ironically, Graham ended up leaving Indiana for Florida shortly after, not unlike Pfizer pulling out of New London, CT after eminent domain destroyed Suzette Kelo’s home for what was supposed to be a Pfizer facility. In both instances, the instigators did untold damage to property rights in the name of economic development, and then took-off before the original project they lobbied for was completed.

Desperation drives other states
Unlike Indiana, the central states of Kentucky, Mississippi, Arkansas, Tennessee, and Louisiana were desperate to get I-69 running through their states. The promise of economic development and the revival of dying towns losing their young people to bigger cities and their aging populations helped them become the corridor’s biggest cheerleaders.

Tennessee actually broke ground on the first segment of I-69 using a pass-through financing deal (where a county issues the debt and the state pays them back for it) and didn’t do it as a toll road. Perhaps the opposition didn’t come through these states since I-69 mostly involved upgrading existing roads.

In another ironic twist, the former mayor of Dyersburg, TN opined that a textile mill in town closed down due to NAFTA. Their 1,200 workers, even in a right to work state, couldn’t ‘compete’ with China and Mexico. Yet now he wants a NAFTA superhighway plowing through his community so more jobs can be shipped out of Tennessee. The same could be said of Michigan. No state has been more adversely impacted by NAFTA and the wholesale shift of jobs out the U.S. by the auto industry, but it, too, wants to see I-69 complete the decimation.

Texas for sale
In Texas, Governor Rick Perry is cut from the same cloth as Daniels — the more privatization the better. In fact, his economic development office put the ‘For Sale’ sign out with an official ad campaign. His transportation department (TxDOT) pimped out Texas infrastructure overseas seeking foreign ownership first from France, but eventually Spain.

Perry’s grand Trans Texas Corridor (TTC) plan — a 4,000 mile network of multi-modal foreign-owned toll projects across the state using P3s — included four major, north-south international trade corridors, one of which was I-69. It would have confiscated over 500,000 acres of private property, most of it through the agricultural food basket of Texas.

Like the Tokarskis, ordinary Texans in the path of the TTC, like David and Linda Stall, Hank Gilbert, and an unexpected coalition of groups including TURF, ranging from environmentalists, property rights advocates, and anti-tax conservatives, all rose-up to halt the biggest land grab in Texas history. They not only worked through the NEPA process, they worked their state legislature in a Texas-sized revolt that reaped a moratorium on P3s in 2007. But Perry managed to weaken the final bill to grandfather in portions of the TTC.

By 2011, TURF saw it through to get the repeal of the Trans Texas Corridor from state statute, but 15 segments of road can still fall under a P3 — again, thanks to Perry and his highway department’s lobbying of local politicians. Though Dellinger tries to paint some of the TTC’s detractors in a negative light for their concerns over the TTC facilitating a North American integration, his book fully makes the case that it’s true.

Economic development at what cost?
The bottom line is: the promise of economic development is a crap shoot at best. No one has a crystal ball that can deliver a winning formula ensuring all parties end up with greater prosperity or quality of life. Quality of life, after all, is as individual as each human being. Some people are going to get hurt, and others will prosper at the expense of those parties. The way government works, it’s the government picking the winners and losers based on cronyism, so facts, fairness, and reason get smothered by the economic interests of the well-connected.

One thing is certain, facilitating international trade erodes our national sovereignty through deeper economic integration with Canada and Mexico and relaxing border crossings, and it hurts American workers and communities whose jobs are being shipped overseas or wages depressed to stay ‘competitive’ with third world countries. With the risks so heavily outweighing the benefits, I-69 as it was initially envisioned is best left as unfinished business of the ‘breakfast club’ where it all began.